In MMPORGS like MUDs, a reference to a player's supplementary--thus "alternative"--avatar/character. Not the player's primary character but one used for blowing off steam, avoiding a primary character's responsibilities, or exacting anonymous revenge on a player-character you dislike.

I logged on with my alt after PKing him cuz I didn't want him to gank me.

gaming: An alternative character, as opposed to one main character you play in a game. Many online games allow the user to make multiple characters. People that make alts to an extreme are said to be altoholics.